Is Japan the missing link in China’s grand Asia-Pacific dream?

Jhinuk Chowdhury is a former journalist based in India and is currently working as an independent writer. She has worked as a business correspondent for the leading Indian daily – The Times of India – covering human resources, IT, jobs and careers.
You can follow her on Twitter @jhinuk28.

World leaders take their seats as China's President Xi Jinping (C) prepares to deliver opening remarks at the Asia-Pacific Economic Cooperation (APEC) leaders' meeting at the International Convention Center at Yanqi Lake in Beijing, November 11, 2014 (Reuters / Pablo Martinez Monsivais) / Reuters

The reason behind China’s ‘frosty’ handshake with Japan is the significant role it plays in President Xi’s Asia-Pacific dream.

The handshake which Chinese President Xi Jinping and Japanese PM
Shinzo Abe shared grabbed most of the headlines during the
recently concluded Asia Pacific Economic Cooperation (APEC)
Summit held in Beijing.

Relations between the two have been strained due to their fierce
discord over control of the East China Sea islands called Diaoyu
by China and Senkaku by Japan. Additionally Japan’s treatment of
its colonial history enrages China - especially Abe’s visit to
the Yasukuni shrine for the war dead, which the Chinese who were
once under Japanese rule, see as a symbol of Japan’s military
aggression and a denial of its imperial brutality.

So the decision for a meeting called for a lot of diplomatic
balancing by Mr. Xi, who has been declining Mr. Abe’s requests
since the 2012 fallout when China witnessed a country-wide
anti-Japan protest after the Japanese
government purchased the Diaoyu/Senkaku islands from private
Japanese owners.

On one hand is the nationalistically charged Chinese public
opinion and on the other the international observers who expected
Beijing to act as an affable host.

However there are reasons why the Chinese President braved the
speculation and shook hands with PM Abe. Prospects of better ties
with Japan add enormously to Xi’s Asia-Pacific Dream - an
economically and even politically integrated Asia-Pacific region
with Beijing at its center.

At the heart of this dream is his “Asia for Asians”
concept which refers to the capability of Asian community to
resolve their issues themselves without needing any
“external” intervention - believed to be a direct shot
at the US’ “Asia Pivot.”

China has been building its case for an integrated economic zone
through its massive infrastructure investment in the region and
high profile initiatives like the Maritime Silk Road. Quite
symbolically just ahead of the summit, President Xi announced an
investment of $40 billion into the Silk Road fund that is
committed to addressing the connectivity bottleneck in Asia.

Expected to top a GDP of $10 trillion by the end of this year, China
sees itself as a natural leader of the Asian region – a notion
which gets contradicted by the existence of the US pursued
initiative - the 12 member Trans Pacific Partnership (TPP) –
which incidentally excludes China but includes Japan as one of
its main members in the region.

Beijing interprets TPP - an important part of Obama’s Asia Pivot
–as a China containment tool. It seems to be particularly worried
about the military alignment between Tokyo and Washington. No
less a nationalistic leader than Mr. Xi, PM Abe also harbors the
dream of becoming the number one power in Asia – a drive which
has led him to brace up the country’s collective self-defense and
deepen its military ties with the US.

Reports have it that the US and Japan are
currently working on revising their defense plans apparently in
anticipation of “new threats,” which experts feel is a
tacit reference to China and its regional expansionism.

The pivot to Asia policy will reportedly have Washington install
three additional ballistic missile defense (BMD) capable
destroyers in Japanese ports. Tokyo also will be increasing its
fleet of BMD destroyers by 2018, apart from additional submarines
and helicopters.

Quite obviously, as of today Japan is one of the few countries
that can challenge China militarily.

To counter this Beijing may use trade as a tacit pressure to get
Japan by its side. At least that’s what it looks like going by
the steps it took in dealing with its neighbors during APEC.

Already pursuing its Asia-Pacific free trade idea, called FTAAP -
for which it secured a buy-in from APEC members to launch a two
year strategic study, Beijing has also been pushing for a
trilateral regional free trade agreement between China - South
Korea - Japan.

During the summit China successfully concluded a free trade
agreement (FTA) with South Korea with the promise of
removing over 90 per cent of the tariffs on goods over the next
two decades. Many feel this could be the first step towards
getting Japan into the trilateral free trade agreement fold.

Japan is already alarmed at the development, especially the
business community that wants better ties with China. As per
reports Japan will lose annual exports worth
$5.3 billion to South Korea after the China-South Korea FTA takes
effect, while South Korea’s exports to China may rise by $27.7
billion.

The growing middle class in China is a massive market and source
of growth for a sluggishly growing Japan. However, trade between
the two has been declining for the last two years. According to
the Japan External Trade Organization (JETRO) Japan’s total trade with China dropped
6.5 percent to $311.9 billion in 2013 from over $332 billion in
2012. Reports confirm if the political situation
remains inflated trade could take a further hit.

The Japanese trade community is already propagating closer ties
with China which Beijing may use to get Japan to eventually sign
the trilateral FTA. Economically and militarily advanced, Tokyo’s
membership of the trilateral FTA will create a considerable
counter balance for the US’s TPP. In fact incidentally the TPP
members had a not so successful meet on the sidelines of the APEC
summit, due to a disagreement with Tokyo over trade barrier
issues. Observers feel Beijing will not shy away from using this
discord to its advantage.

There have been other significant developments around the time of
the APEC summit which indirectly further Beijing’s Asia-Pacific
dream. On one side was the second mega energy deal with Russia
and talks of deepening ties with Australia which already has
China accounting for 23 percent of its two-way trade. On the
other is the expanding relation between Moscow and Tokyo with
both committing to expand bilateral relations despite Japan being
pressed to align closer with western allies over sanctions on
Russia – its fourth largest supplier of natural gas and
fifth-largest source of crude oil.

All these growing alliances actually put in place the entire
string of China’s integrated Asia-Pacific aspiration with strong
economic nations like South Korea and Australia on one side and
an all-time ally Russia on the other. The only missing link
perhaps is Japan. Whether Beijing can get this link to have its
circle closed remains to be seen.

The statements, views and opinions expressed in this column are solely those of the author and do not necessarily represent those of RT.